On 6th of March, one of the biggest annual gathering of the green finance industry was successfully held at the Guidhall, London. The Climate Bonds Initiative, partnered with the City of London’s Green Finance Initiative, had its 2017 Climate Bonds Annual Conference, which is also the 2017 Green Bond Pio*neer Awards. More than 600 participants from 40 countries attended the conference. Tracy Cai, the Chief Executive Officer of Syntao Green Finance, as one of the Chinese representative, shared her experiences of China’s green bond market development.
The Awards are in recognition of leading organizations, financial institutions and governments, who have pushed green finance forward and developed the green bonds market in the past year through their pio*neering initiatives and issuances, providing a positive example of low carbon investments. Awarded Chinese institutions include: The People’s Bank of China, Shanghai Pudong Development Bank, Bank of China, Shanghai Stock Exchange, China Central Depository & Clearing Co ., Ltd, The Export-Import Bank of China and China Construction bank, etc.
(Climate Bonds Initiative, https://www.climatebonds.net/tags/2017-green-bond-awards)
A packed day of conference session was arranged after the award ceremony, where experts from all over the world discussed the year ahead and prospects for green finance out to 2020. The major conclusions emerged were: The size of the environment-friendly security market is about to double again, and the green bonds market, as a direct result, will be tinted with various colors. “There’s about $100 trillion of institutional money in the world, and less than 1 percent is invested in anything green,” said Michael Sheren, an adviser to the Bank of England, who is co-chair of the Group of 20’s Green Finance Study Group. “We have to make it palatable to institutional investors. Green bonds are the best instrument to do this.”
(Climate Bonds Initiative, https://www.climatebonds.net/tags/2017-green-bond-awards)
China’s $36 billion of green bonds issued last year made up about a third of the market. According to Tracy Cai, co-founder and CEO of SynTao Green Finance, China’s issuance would have to rise to 20 % of its domestic bond market in order to reach the government’s environmental target. Green bonds made up only 2 percent of China’s bond market last year, and the issuance will be very likely to double in 2017.
(Climate Bonds Initiative, https://www.climatebonds.net/tags/2017-green-bond-awards)
Currently, Chinese government is exploring tax incentives on green bonds. The People’s Bank of China estimates that 2 trillion yuan to 4 trillion yuan must be invested every year in order to fix environmental problems and to mitigate climate change. Public money will cover only 15 percent of its needs. China needs private capital to pay for the rest.
China’s performance were highly appreciated by various international financial institutions and media. Moody’s Vice President Henry Shilling said, “2016 was an unusually large year for green bond activity. The $95 billion’s green bond market had grew 120 percent comparing to that in 2015. China was playing catch-up to Western markets.” He also predicted that, the growth in 2017 will be around 30%. Bloomberg used expressions like “Brazil and China lead sovereign push into new shades of green” and “China will lead on issuance” in the latest report for the conference.
This report is based on the according reports from Bloomberg and CBI.